9 December 2016 12:00 am
REUTERS: Emerging market stocks climbed the most in a month yesterday, as Russia’s approval of the sale of a 10.5 billion euro stake in its largest oil firm sent Moscow shares to a record high and forecast-beating Chinese trade data lifted the mood.
MSCI’s emerging market index jumped 1.3 percent in the wake of China reporting upbeat trade figures, with exports and imports both beating forecasts.
The European Central Bank was also expected to extend its already generous 1.5 trillion euro stimulus programme later. That could help offset some of the pressure on EM assets if U.S. interest rates rise next week
as expected.
“The trade data is giving an extra boost to emerging markets today but it’s part of a broader trend,” said Per Hammarlund, Chief Emerging Markets Strategist at SEB.
“People have started to get used to (U.S. President-elect Donald) Trump being in office and the Fed hike is pretty much fully priced in... Commodity prices have continued to go up, and that sentiment is also starting to affect emerging markets.”
China’s data as well as a softer dollar in the currency markets had given most emerging Asian markets a solid lift overnight, although notably not those in China itself.
Russian rouble-denominated stocks then hit an all time high after Moscow said yesterday it sold a 10.5 billion euros (US $11.3 billion) stake in oil giant Rosneft to Qatar and commodities trader Glencore.
Not only was the money considerable, but the deal also confounded expectations that the Kremlin’s standoff with the West might scare off major investors from such high profile assets.